Australias Growth Outside Capital Cities

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Growth in Commercial property outside major capital cities.

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AUSTRALIAS GROWTH OUTSIDECAPITAL CITIESURBIS CENSUS 2011 PAPER NO. 1Outside of Australias five largest capital cities, regional populations grew strongly from 2006 to 2011. Our analysis of the 2011 Census results show that the metro-hinterlands within 90 minutes of the capitals attracted the greatest growth, and that these areas offer the greatest opportunity for further investment in development. Coastal areas, particularly in Queensland, continued to be popular, and mining stimulated important pockets of development, particularly in Western Australia. To maximise these opportunities, the role of government is important. Some pro growth Councils have delivered growth to their areas, while the Census identifies that government spending in slow growth areas is not effective.

Michael Barlow Director 03 8663 4820 mbarlow@urbis.com.au

Mark Solonsch Senior Research Manager 03 8663 4819 msolonsch@urbis.com.au

Sydney

Melbourne

Brisbane

Perth

urbis.com.au

INTRODUCTIONOVER ONE-THIRD OF AUSTRALIANS LIVE OUTSIDE OF THE CAPITAL CITIES COMMONLY REFERRED TO AS REGIONAL AUSTRALIA.These regional areas attract significant political attention and funding support, but these areas can exhibit extraordinarily different characteristics. The release of the 2011 Census data provides the opportunity to better understand how regional Australia is travelling and its future potential. To undertake this research, Urbis constructed 166 Urbis Regional Areas (URAs) for analysis. These URAs range from small areas with just over 3,000 people such as Eden in NSW and Tennant Creek in NT up to the largest area of the Gold Coast in Qld with over half a million. There are vast differences between these regions, but they share one thing in common they are not a part of Australias five largest capital cities. Most surprisingly we found that there was very significant growth in the hinterland areas of the five largest cities. The closer to the capital city, the greater its growth rate.Type of area2 Metro-hinterland Coastal Xtra-peri Mining areas Inland areas River areas3 MINOR CAPITALS DWELLING GROWTH 22,295 METRO AREA 22 METRO HINTERLAND AREAS DWELLING GROWTH 64,882 33 XTRA-PERI AREAS DWELLING GROWTH 33,618 107 OTHER REGIONAL AREAS DWELLING GROWTH 71,490

Percent increase in occupied dwellings from 2006-2011 13.5% 11.8% 11.3% 11.0% 10.5% 8.6% 10.4%

Average of all URAs

Across all URAs, the average increase in occupied private dwellings was 10.4% over the five years from 2006 to 2011. The greatest increase was among metro-hinterland areas and the slowest growth among river areas, such as along the Murray. This report offers insights about 5.77 million people living in 2.15 million dwellings. Over the five years from 2006 to 2011, that is an increase of 186,000 dwellings.

Fastest growing Regional urban areas 2006 to 2011 1. Torquay (Vic) 2. Drouin (Vic) 3. Latrobe (Tas) 4. Clare (SA) 5. Busselton (WA) 6. Mareeba (Qld) 7. Moruya - Tuross Head (NSW) 8. Margaret River (WA) 9. Strathalbyn (SA) 10. Yeppoon-Emu Park (Qld)1

Percent increase in occupied dwellings from 2006-2011 34.8% 32.9% 28.4% 28.3% 28.2% 26.2% 25.3% 24.8% 23.8% 23.6%

Slowest growing Regional urban areas 2006 to 2011 Roma (QLD) Broken Hill (NSW) Eden (NSW) Deniliquin (NSW) Kyabram (VIC) Queenscliff (VIC) Ingham (QLD) Carnarvon (WA) Port Augusta (SA) Leeton (NSW)

Percent increase in occupied dwellings from 2006-2011 -3.7% -3.4% -1.4% -1.3% -1.0% -0.4% -0.3% -0.1% 0.1% 0.3%

2

An Urbis Regional Area is based on 2011 SA2 boundaries. To compare to the older 2006 ABS geographical classification, Urbis has used ABS correspondences and GIS analysis to create a best fit based on 2006 CCDs. An URA can fit into more than one category such as being both a mining area and also being coastal.

2 CENSUS PAPER NO. 1 - REGIONAL CITIES AND AREAS

METRO-HINTERLAND AREAS WITH PLANNING SUPPORTAcross regional Australia, Metro-hinterland areas have achieved the highest dwelling growth of all areas.

THE FASTEST LANE:

A METRO-HINTERLAND AREA IS:

Outside of the Greater Capital City Statistical Area

Within 1.5 hour travel time from the CBD of the State capital4

These areas are different from the outer suburban growth zones of our major cities. They are quite distinct areas, with their own characteristics. Across Australia, there are four examples of substantial metro-hinterland areas with over 100,000 residents Gold Coast, Sunshine Coast, Illawarra and Geelong. However, the star performers over the last five years were mid-sized metro-hinterland areas. These areas are growing due to affordable housing and improvements in transport links to the major capital cities nearby. In the early stages of their growth, they are feeder cities for the capitals, but quickly develop enough critical mass to sustain their growth for the longer term. TORQUAY:The fastest growing metro-hinterland area was Torquay with a 34.8% increase in occupied dwellings. It is south of Melbourne just under a 90 minute drive. It has the added benefits of being a coastal area and being very close to the large provincial city of Geelong. From early 2000s, Mirvac began developing Torquay with a 126 lot gold course resort, The Sands. Development in Torquay was accelerated even further in 2007, when the Torquay Jan Juc Structure Plan was developed. AFFORDABILITY AS A KEY Urbis consumer research conducted prior to the residential boom in 2003 found high levels of interest in Torquay residential development, particularly from the Geelong commuter market, and also from Melbourne retirees. Some were concerned about the many new estates in the area, but there was quite a remarkable change in attitude when informed of the pricing for house and land at $300-$350,000 which was perceived to be particularly good value.

S.A. VIC

DROUIN:The second fastest growing metro-hinterland was 75 minutes east of Melbourne at Drouin with a 32.9% increase in occupied dwellings. It is located only 15 minutes from the slightly larger area of Warragul, and while both towns are striving to retain their individual identities, they are now merging into a substantial economic zone of over 30,000 people, which may create even more momentum.

STRATHALBYN:In South Australia, Strathalbyn which is 1 hour south of Adelaide increased its occupied dwellings by 23.8%. In 2005, the Strathalbyn Town Plan identified that to meet future demand strategic areas needed to be rezoned for residential development. The Mt Barker council rezoning allowed for an additional 1,025 new homes.

4

Excludes Darwin

CENSUS PAPER NO. 1 - REGIONAL CITIES AND AREAS 3

THE BIG DEVELOPMENT OPPORTUNITY:NORTH OF PERTHThe strong growth in metro-hinterland areas around Australia is not a new phenomenon, and the map below shows the metro-hinterland and xtra-peri locations around the five major capital cities which are already established and growing strongly.

There is an obvious gap in metro-hinterland and xtra-peri land North and East of Perth. Every other capital city has substantial metro-hinterland and xtra-peri Regional Urban Areas, and most are growing strongly. These are not urban growth areas, but distinct communities within commuting distance.

Barossa +9.3 Clare +28.3 Port Pirie +4.5 Berri -4.2 Loxton +10.5

Toowoomba +9.2

Gympie +15.8 Kingaroy +30.6 Sunshine Coast +12.6

Bathurst +9.3 Lithgow +6.3

Gold Coast +13.6 Warwick +19.8 Tweed Valley +8.1 Lower Hunter +6.1 Singleton +12.4

Bunbury +10.7 Busselton +25.9 Capel +25.9

Murray Bridge +14.7 Strathalbyn +23.8 Victor Harbor +15.9

Goulburn +8.8 Illawarra +5.5 Lower Hunter +6.1 Nowra +6.8 13 areas S & E Metro-hinterland: +5.2 to +34.5 Xtra-peri: -0.4 to +26.4 Huonville +24.7

15 areas N & W Metro-hinterland: +3.3 to +12.4 Xtra-peri: -1.0 to +18.2

The most obvious missing piece of the puzzle is the area north of Perth. Despite the rapid growth in WA, the metro-hinterland locations north of the city are currently undeveloped. It is only a matter of time. LANCELIN, CERVANTES AND JURIEN BAY Development of a major road infrastructure Indian Ocean Drive - will assist development of towns along this section of the coast.

W.A.

LANCELIN. The biggest residential development to ever hit Lancelin is underway at Lancelin South, 2.2km from the Lancelin townsite, and is planned to ultimately be a 4000 lot community. Texan Joe Matthews owns the Lancelin South land and has been trying for 10 years to commence development but has been delayed because of servicing issues. TURQUOISE COAST. The Shire of Dandaragan has developed a Regional City Plan for the coastal strip from Cervantes to Jurien Bay. Jurien Bay was named as one of WA Regional Development Minister Brendon Grylls Supertowns in 2011. The Structure Plan includes over 11,000 residential lots, a tourism precinct and substantial plans for the Cervantes township. Developer partnerships are still being sought by the Shire.

P

4 CENSUS PAPER NO. 1 - REGIONAL CITIES AND AREAS

STRUCTURE PLANS VS RESIDENTS ASSOCIATIONS:Although metro-hinterland areas have tremendous geographical advantages, the planning environment can have a major impact on the growth achieved in these areas. Three metro-hinterland areas close to Melbourne demonstrate the huge impact between areas that welcome growth and areas which oppose growth.

THE ACHILLES HEEL

Table 1 shows that Drouin and Torquay have achieved over 30% dwelling growth over the five years to 2011, while Woodend (a highly accessible township) has achieved virtually no growth. Drouin and Torquay have pro-growth Structure Plans. Woodend has a very strong residents association. It is clear that growth is difficu